Chesapeake Exploration LLC et al v. BP America Production Company

Filing 211

ORDER granting 196 plaintiff BP America Production Company's Motion for Review of Taxing of Costs and awarding BP costs for demonstrative exhibits used at trial in the amount of $22,385.00 (as more fully set out in order). Signed by Honorable Vicki Miles-LaGrange on 11/12/2013. (ks)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
BP AMERICA PRODUCTION
COMPANY,
Plaintiff,
v.
CHESAPEAKE EXPLORATION, LLC,
et al.,
Defendants.

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Case No. CIV-10-519-M

ORDER
Before the Court is plaintiff BP America Production Company’s (“BP”) Motion for
Review of Taxing of Costs, filed July 25, 2013. On August 15, 2013, defendants Chesapeake
Exploration, L.L.C. and Chesapeake Investments (collectively “Chesapeake”) filed their
response, and on August 16, 2013, BP filed its reply. Based upon the parties’ submissions, the
Court makes its determination.
I.

Background
On April 21, 2010, Chesapeake commenced this litigation in the District Court of

Oklahoma County, Oklahoma, seeking an order prohibiting an arbitration panel from considering
this matter any further.1 On May 17, 2010, this matter was removed to this Court by BP. On

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This litigation arises out of a breach of contract action between BP and Chesapeake. On July 14,
2008, the parties entered into a contract for the sale of a large number of oil and gas properties
located in eastern Oklahoma. Pursuant to the “Purchase and Sale Agreement” (“PSA”), after
closing, BP would have a period to investigate and conduct due diligence on matters such as
whether Chesapeake actually had title to the properties it purported to sell. A disputed title issue
arose between the two parties and on May 8, 2009, the disputed title claims were submitted to
title arbitration pursuant to the PSA. On December 30, 2009, the arbitration panel awarded
$11,526,434 in title defects, and $3,737,031 in title benefits to BP. On March 24, 2010, BP
notified the arbitration panel that Chesapeake had not paid the full amount due and requested the
panel to provide further clarification. On April 2, 2010, the arbitration panel asked BP to provide

February 20, 21, and 25, 2013, the non-jury trial in this matter was held, and on April 5, 2013,
this Court entered judgment in favor of BP.2 On April 26, 2013, BP filed two documents (1) a
Bill of Cost [docket no. 169] and (2) a Motion for Attorneys’ Fees and Costs and Brief in
Support Thereof and In Support of Bill of Costs (“Motion for Fees/Costs”) [docket no. 170].
BP included costs of demonstrative exhibits of $22,385.00 in both its Bill of Costs and
Motion for Fee/Costs. On July 18, 2013, the Court Clerk taxed costs in the amount of $3,627.50
against Chesapeake and denied BP’s request for $22,385.00 in costs related to demonstrative
exhibits used at trial [docket no. 193]. The Court, on July 29, 2013, awarded BP attorneys’ fees
and disbursements3 against Chesapeake but found that BP’s request for costs in the amount of
$26,012.50 was moot because the Court Clerk had already taxed costs against Chesapeake in the
amount of $3,627.50. BP now moves the Court to review the taxation of costs.
II.

Discussion
A.

Judicial Review

In their response to BP’s Motion for Review of Taxing of Costs, Chesapeake contends
that BP’s motion is moot pursuant to the Court’s Order [docket no. 198] filed July 29, 2013, at
Sec. III, p.4, which stated:
In addition to the request for costs made by BP in the instant
motion, BP timely filed a separate Bill of Costs on April 26, 2013,
pursuant to Local Civil Rule 54.1, requesting the same $26,012.50
in costs. On June 24, 2013, the hearing on BP’s Bill of Costs was
held, and on July 18, 2013, costs were taxed by the Court Clerk
against Chesapeake in the amount of $3,627.50. Because BP’s

. . . a detailed explanation of the amount still owed, and allowed Chesapeake to respond. Rather
than responding, Chesapeake commenced this action in state court.
2
The Court awarded BP the sum of $22,265,302 for unpaid agreed title defects with interest
accrued and accruing thereon from and after February 2, 2010, at the rate of six percent (6%) per
annum until paid.
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The Court awarded BP attorneys’ fees in the amount of $1,334,952.00 and disbursements in the
amount of $68,717.38 for a total of $1,403,669.38 against Chesapeake.
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costs have been taxed by the Court Clerk, the Court FINDS BP’s
request for costs in the instant action is MOOT.
BP asserts that the Court did not rule on the merits of BP’s request for $22,385.00 in costs
related to demonstrative exhibits at trial and, therefore, it is entitled to judicial review of the
Court Clerk’s taxing of costs pursuant to Federal Rule of Civil Procedure 54(d)(1), which
provides in part:
Unless a federal statute, these rules, or a court order provides
otherwise, costs other than attorney’s fees—should be allowed to
the prevailing party . . . . The clerk may tax costs on 14 days’
notice. On motion served within 7 days, the court may review the
clerk’s action.
The Court only found BP’s request for costs of $22,385.00 for demonstrative exhibits
used at trial moot as to BP’s Motion for Attorneys’ Fees and Costs [docket no. 170] and did not
rule on the merits of BP’s request for costs related to demonstrative exhibits. Accordingly, the
Court finds that BP is entitled to judicial review of the Court Clerk’s taxing of costs and that
BP’s, timely filed, Motion for Review of Taxing of Costs is not MOOT.
B.

Fees for exemplification and copies

In its motion, BP requests the Court to review the Court Clerk’s taxation of costs and
seeks an order awarding it an additional $22,385.00 in costs for demonstrative exhibits used at
trial. BP contends that as the prevailing party and pursuant to the terms of the PSA4, Federal
Rule of Civil Procedure 54(d)(1), and 28 U.S.C. § 1920, BP is entitled to recover certain of the
costs incurred in this action.

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Joint Exhibit 1, PSA, § 15.12 [docket no. 80-2] provides that:
If any Party institutes an action or proceeding against any other
Party relating to the provisions of this Agreement, including
arbitration, the Party to such action or proceeding which does not
prevail will reimburse the prevailing Party therein for the
reasonable expenses of attorneys’ fees and disbursements incurred
by the prevailing Party.
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28 U.S.C. § 1920 provides:
A judge or clerk of any court of the United States may tax as cost .
. . fees for exemplification and the costs of making copies of any
materials where the copies are necessarily obtained for use in the
case.
28 U.S.C. § 1920(4). The Tenth Circuit has found that:
The “necessarily obtained for use in the case” standard does not
allow a prevailing party to recover costs for materials that merely
“added to the convenience of counsel” or the district court. To be
recoverable, a prevailing party’s transcription and copy costs must
be “reasonably necessary to the litigation of the case.” Materials
produced “solely for discovery” do not meet this threshold. At the
same time, we have acknowledged that materials may be taxable
even if they are not “strictly essential” to the district court’s
“resolution of the case.” The “realities of litigation occasionally
dispense with the need of much of the discovery already taken by
the parties when, for instance, a dispositive motion is granted by
the trial court.” Our cases establish that if deposition transcripts or
copies were “offered into evidence,” were “not frivolous,” and
were “within the bounds of vigorous advocacy,” costs may be
taxed. This standard recognizes that “caution and proper advocacy
may make it incumbent on counsel to prepare for all contingencies
which may arise during the course of litigation,” including the
“possibility of trial.”
Thus, we do not “employ the benefit of hindsight” in determining
whether materials for which a prevailing party requests costs are
reasonably necessary to the litigation of the case. We base this
determination, instead, solely “on the particular facts and
circumstances at the time the expense was incurred.” The standard
is one of reasonableness. If “materials or services are reasonably
necessary for use in the case,” even if they are ultimately not used
to dispose of the matter, the district court “can find necessity and
award the recovery of costs.” Thus, we will not “penalize a party
who happens to prevail on a dispositive motion by not awarding
costs associated with that portion of discovery which had no
bearing on the dispositive motion, but which appeared otherwise
necessary at the time it was taken for proper preparation of the
case.”
In re Williams Sec. Litig. – WCG Subclass, 558 F.3d 1144, 1147-48 (10th Cir. 2009) (internal
citations omitted).

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Further,
“Exemplification” under § 1920(4) has been interpreted to include
a variety of demonstrative evidence, including models, charts,
photographs, illustrations, and other graphic aids. Even so, there
must be a showing that the fees are necessary as opposed to merely
convenient or helpful.
Osorio v. One World Techs. Inc., 834 F. Supp. 2d 20, 23 (D. Mass. 2011) (internal citations
omitted).
BP asserts that the demonstrative exhibits were extensively used in the non-jury trial of
this matter. These exhibits consisted of charts, timelines, excerpts, and blowups of documents
and deposition testimony, and other material to assist in explaining the complex transactions and
series of events at issue at trial. BP also contends that the reasonableness and importance of the
use of these demonstrative aids is evidenced by the fact that both parties prepared and used over
forty pages of such exhibits during trial and submitted these materials into evidence for the
Court’s further consideration. Further, BP provided an invoice from Legal Graphics [docket no.
169-3], which gave a breakdown of the costs associated with the creation and use of the
demonstrative evidence presented by BP.
Taking into consideration the facts and circumstances surrounding the extensive use and
the submission into evidence of the demonstrative exhibits at the non-jury trial held on February
20, 21, and 25, 2013, the Court finds that BP has satisfied its burden of showing that the copies
were necessarily obtained for use in this case. Accordingly, the Court finds that BP should not
have been denied the $22,385.00 in costs for demonstrative exhibits used at trial.
III.

Conclusion
For the reasons set forth above, the Court GRANTS BP’s Motion for Review of Taxing

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of Costs [docket no. 196] and AWARDS BP costs for demonstrative exhibits used at trial in the
amount of $22,385.00.
IT IS SO ORDERED this 12th day of November, 2013.

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